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Russia Report: March 14, 2001

14 March 2001, Volume 3, Number 10
"Moskovskii komsomolets" reported on 12 March, without reference to sourcing, that presidential envoy to the Volga region Sergei Kirienko has proposed a plan that would create a system of regional prime ministers who would have direct responsibility for regional economies. The daily concluded that if implemented, the plan would seriously reduce the power of governors, since regional legislatures, not governors, would appoint the prime ministers. However, the newspaper did not clarify how having regional legislatures appoint the prime ministers would necessarily result in the selection of a more independent prime minister. Frequently regional legislatures are loyal to the regional head, a fact that it appeared to acknowledge with regard to the legislatures of Moscow city and Moscow Oblast. According to the daily, the plan will be "tested" by Kirienko in Nizhnii Novgorod Oblast, and if successful, it will be replicated throughout Russian regions. Kirienko's plan, if it does indeed exist, is only the most recent proposal by Kirienko to refashion economic relations in the regions. Earlier, a variety of sources reported that Kirienko had suggested that the envoys be given responsibility for overseeing financial flows between the regions and the federal center (see "RFE/RL Russian Federation Report," 20 December 2000). JAC

In the same article, "Moskovskii komsomolets" implied that Nizhnii Novgorod has been selected as the test case because incumbent Governor Ivan Sklyarov will be facing re-election in July. And it is therefore important for Sklyarov that Kirienko "not play a role against him" remaining in power. However, Kirienko may have already made his feelings clear regarding Sklyarov. Last week, he was quoted in an TV interview with a local station in Nizhnii Novgorod Oblast saying that "if it were up to me, [incumbent Governor Ivan Sklyarov] would be dismissed." Soon after the report was aired, the journalist, Gennadii Grigoriev, who conducted the interview, and the TV station where he worked received threatening phone calls, RFE/RL's Nizhnii Novgorod correspondent reported. The journalist then disappeared, according to the station (see "RFE/RL Newsline," 8 March 2001.) A competing local television station, however, reported on 13 March that Grigoriev had subsequently returned to work alive and well and that local law enforcement authorities had found no evidence of a kidnapping or other crime. JAC

The presidential envoy to the Central federal district, Georgii Poltavchenko, met on 6 March with State Duma deputies elected from regions in his district, "Kommersant-Daily" reported the next day. According to the daily, Poltavchenko was received warmly by the deputies who offered to cooperate with him on "any question" and suggested that a new interfactional deputy group called "Center of Russia" be formed from their ranks and headed by independent deputy Nikolai Ryzhkov. Deputy (Fatherland-All Russia) Georgii Boos even proposed that financial resources should be concentrated within the federal districts. He said "I believe that the district must become self-sufficient. If [the district] has its own budget, then within two or three years we can help our neighboring districts to get by. In addition, it would be wise to distribute [federal] transfers within the district." Before anyone could object to Boos' proposal, Poltachenko then promptly closed the meeting, according to the newspaper. Poltavchenko told the daily that he has enough work to do with the responsibilities President Vladimir Putin already gave him, "but Boos has made an interesting suggestion." He continued, "I don't know if the government would agree with this. But I can assure you that I will bring every practical [proposal] from the governors, deputies, or simple citizens to the attention of the president." Last December, "Kommersant-Vlast" reported that members of the Kremlin's Main Territorial Administration had started an outreach to Duma deputies as part of that administration's effort to curb what it saw as the envoys' attempts to expand their role (see "RFE/RL Russian Federation Report," 20 December 2000). JAC

The World Bank is concluding negotiations with the Russian government to fund an $80 million pilot program that would "liquidate" certain cities and villages in the Far North that are considered "unsalvageable," "The Moscow Times" reported on 13 March. According to the daily, three Soviet-era settlements have been selected for the project's initial phase, Vorkuta in the Komi Republic, the Susuman district in Magadan Oblast, and Norilsk in Krasnoyarsk Krai. Under the terms of the project, eligible families would receive housing vouchers to move away. Once they sign a contract to purchase an apartment or home elsewhere, they present the voucher to a local branch of Sberbank, which would then pay the owner of the property directly. The vouchers would be non-transferable. JAC

Meanwhile, economists Clifford Gaddy of the Brookings Institution and Barry W. Ickes of Pennsylvania State University are conducting research to figure out the "costs" arising from the location in Russia of significant population and industrial centers in regions much colder than the rest of the world. Presenting the results of their work in progress at a conference at Columbia's Harriman Institute on 27 February, Gaddy argued that although the Bolsheviks took over a country that was extremely cold, they made the situation worse. Using the notion of TPC, or temperature per capita, a measure that he and Ickes have devised, Gaddy showed that in 1926, Russia's TPC was minus 11 degrees Celsius. Thanks to Soviet industrial location policies, by the end of the Soviet period, the TPC had dropped one full degree to minus 12. Meanwhile, nations elsewhere raised their TPCs in the 20th century. In his comments on Gaddy's presentation, Richard Ericson of Columbia University called the TPC a "clever measure" of economic "non-sustainability." It shows, according to Ericson, the "capacities and population in places where they cannot survive without the imposition of massive (excess) social costs." Canada has only one-fiftieth of its population density north of the 60th latitude, while Russia has roughly 7 percent of its population -- or 11 cities with populations each over 200,000 -- in this location. Russia has inherited from the Soviet Union regional economies that would not have developed in a market economy, and according to Ericson, these inherited structures "stimulate the 'feudalistic' compartmentalism and paternalism/protectionism we observe in [Russia's] economic system" today. JAC

President Putin has assigned new members to the presidium of the State Council, following the expiration of the six-month term of the first presidium's members, Russian agencies reported on 12 March. The new members are Jewish Autonomous Oblast head Nikolai Volkov, Karelia Republic head Sergei Katanandov, Kabardino-Balkaria President Valerii Kokov, Yaroslavl Governor Anatolii Lisitsyn, Omsk Governor Leonid Polezhaev, Bashkortostan President Murtaza Rakhimov, and Khanty-Mansii Autonomous Okrug Governor Aleksandr Filipenko. One leader is chosen from each of the seven federal districts to represent the interests of those regions. Tatarstan President Mintimer Shaimiev's term on the presidium has expired before he was able to present a plan that he developed that would transform the Russian Federation into a confederation and strictly divide certain powers between the regions and the center. That report was supposed to be presented on 20 February but was postponed. JAC

In an interview with "Nezavisimaya gazeta-regiony" on 13 March, Evenk Autonomous Okrug Governor Aleksandr Bokovikov explains why he has chosen not to run in 8 April gubernatorial elections. He says that he "simply and really understood that he has no resources" to cope with another shortfall in the "Northern Delivery." He said, "what will happen after the election if once again as in 1999 there is another interruption in deliveries?" He said that in that year he had meetings with the leadership of Slavneft and then with Almazy Rossii-Sakha and even with the presidential administration but "he couldn't find any real help anywhere." He concluded that the federal government simply has no money "to maintain the North." Next year, he explains that 670-700 million rubles ($24-25 million) are needed for the "Northern Delivery" plus there is an outstanding debt for past deliveries of 350 million rubles, however, Moscow has confirmed financing of only 174 million rubles. The shortfall, according to Bokovikov, will be met only through trade credits earned by YUKOS. "This will save the situation with northern deliveries next year," Bokovikov declared. Last month, "Izvestiya" suggested that YUKOS's interest in the region might not be entirely altruistic. "Izvestiya" reported on 23 February that YUKOS has displayed a strong interest in the region, having recently acquired 68 percent of the share of the East Siberian Oil and Gas Company. That company has a large, highly prospective hydrocarbon deposit in the area, but significant investment would be required to develop it, since currently there are no decent roads, let alone pipelines, leading up to it. Currently, YUKOS executive Boris Zolatarev is a front-runner in the 8 April election. JAC

Some 300 residents in Petropavlovsk-Kamchatskii organized protests against the sharp increase in electricity tariffs, RFE/RL's correspondent there reported on 7 March. Kamchatka Oblast Governor Mikhail Mashkovtsev recently ordered a doubling of electricity rates, raising them to 2 rubles ($.07) per kilowatt hour, compared with the rate in Moscow of 63 kopeks per kilowatt hour. At the same time, another group of protesters in that city have organized pickets outside the Kamchatka Oblast administration building in that city, "Novaya gazeta" reported in its most recent issue, No. 16. The picket-carriers are protesting the results of gubernatorial elections there. The declared winner on that ballot, local Communist Party leader Mikhail Mashkovtsev, believes that he won by a 4,000 vote margin; however, several participants in an election recount reckon that Mashkovtsev's margin of victory was just three votes, and therefore the results of the entire ballot are questionable. According to the weekly, the picket-carriers are hoping that Mashkovtsev will be forced to resign in the same manner as former Primorskii Krai Governor Nazdratenko (see "RFE/RL Russian Federation Report," 7 February 2001). JAC

Gennadii Apanasenko, first deputy presidential envoy to the Far Eastern federal district, officially informed Primorskii Krai's election commission on 12 March that he will run in the 27 May gubernatorial elections, Interfax-Eurasia reported. The previous day, former Governor Yevgenii Nazdratenko told reporters in Vladivostok that he thinks the Kremlin is supporting Apanasenko. But he thinks Apanasenko's chances are not great because "here he is a stranger whom no one knows," according to "Kommersant-Daily" the next day. Nazdratenko refused to say which candidate he supports, according to the newspaper. Nazdratenko repeated his earlier pledge that he will not run in this ballot, but suggested that "this does not mean that I cannot run for the governor's post another time." When Nazdratenko resigned last month, presidential envoy to the Far Eastern district Konstantin Pulikovskii ordered Apanasenko to act as "caretaker" of the region, giving him the informal responsibility for helping the krai's administration develop a program for stabilizing the region's economy. "Segodnya" suggested on 13 March that there so far appear to be two candidates that the Kremlin is supporting, Apanasenko and former Black Sea Fleet Commander Igor Kasatonov. According to the daily, citing unnamed Kremlin sources, Kasatonov reached his decision to run for governor after a conversation with presidential administration head Aleksandr Voloshin. JAC

Farida Gainullina, State Duma deputy (Fatherland-All Russia) and chair of Fatherland's branch in Tatarstan, told RIA-Novosti on 7 March that her party and the regional branch of the Union of Rightist Forces will support Tatarstan President Mintimer Shaimiev in the 25 March presidential election. On 12 March, media in Kazan reported that Unity leader and Emergencies Minister Sergei Shoigu called Shaimiev "a politician of federal stature and one of the brightest figures on Russian Federation's political horizon," Interfax-Eurasia reported. Deputy Prime Minister Valentina Matvienko reportedly said that the Shaimiev's opinion "is one of the most highl-valued by the Russian cabinet." JAC

For the first time, a journalist in Russia is facing charges of libel and defamation in a criminal rather than a civil court, RFE/RL's Moscow bureau reported on 11 March. According to the bureau, the chief editor of the City Television channel in Yaroslavl Oblast, Elvira Mezhenna, is facing charges because of an editorial she broadcast in May 2000. In a report on President Putin's decree reorganizing the administration of the Russian Federation, Mezhenna remarked that "it is no secret that in our oblast federal departments are in fact subordinated personally to the governor" and that "practically all locally-based federal level officials are indebted to [Yaroslavl Oblast Governor] Anatolii Lisitsyn for their appointment." As one example, she cited the head of the Control-Audit Administration of the Ministry of Finance, Nina Ryzhkova, who received not only her job but also other "gifts," and as a result, decisions "contradicting the will of the oblast authorities" are never taken. Ryzhkova complained to the local prosecutor and charges were brought against Mezhenna. JAC

Has a Year Without Yeltsin Been A Year Without Change?

By Julie A. Corwin

President Vladimir Putin will soon mark the end of his first full year as Russia's elected president, but the one policy in which he has devoted the most attention, his regional "reforms," appears to be unraveling. Within the last two months, President Putin has taken a series of actions that work at cross-purposes with the declared aims of his much publicized restructuring of how the Russian Federation is administered.

According to Putin, these reforms had two main aims. One was to create a "single economic and legal field" for Russia, putting an end to the "legal chaos" in which laws in one oblast might contradict laws in a neighboring republic and the federal constitution as well. The other was to strengthen Russia's so-called "power vertical," thus ensuring Russia's integrity as a nation-state by reinforcing the primacy of federal laws and institutions over regional ones. A third and unstated goal of Putin's reforms was clearly to reduce the power of the country's governors. They have been able to rule virtually unchallenged in most regions across the country because they have de facto control over those organs or persons who might "check" their power, that is, the courts and federal officials operating on their territories, local elections commissions, and the media.

Putin went about his task by issuing a decree last May in which he reorganized the Russian Federation into seven federal districts and appointed seven presidential envoys to enforce federal laws. Later that summer, he persuaded the country's legislators to give him the power to dismiss elected regional leaders in the event that a court deems that the official has violated federal law on more than one occasion. He also reorganized the country's upper legislative chamber, making seats in that body an appointed, permanent position, and thus depriving regional leaders of a national forum and of input on federal legislation.

At the one year mark, Putin's reforms cannot be said to have either succeeded or failed. News reports from the regions suggest that the effort to bring regional laws into conformity with federal laws is proceeding -- albeit slowly. However, judging from the results of dozens of gubernatorial elections held last year, the powers of incumbent governors have hardly been curbed. In many cases they were able to deploy the vast administrative resources at their disposal in the service of their campaign. And, with the cooperation of loyal local legislatures, they were able to move up the election date, giving them a distinct advantage over any potential opponents who are left with little time to organize a campaign.

The presidential envoys, who were installed in part to ensure that federal laws are obeyed, did little to intervene. In fact, they increasingly appear not to be performing any kind of control function at all. Instead, they seem to be building individual independent power bases from which they can actively engage in local politics. One deputy presidential envoy has already won election to the post of governor in one of the country's most important regions, the oil and gas rich Tyumen Oblast, while another has just declared his plans to run in the strategically important home of the Pacific Fleet, Primorskii Krai. So far, President Putin, to whom the envoys must answer, has done nothing to check this trend.

Instead, Putin has taken three actions in recent months that undermine the reforms to which he devoted so much attention at the beginning of his term. Last month, Putin signed into law a bill that allows the majority of the country's incumbent governors to seek a third term and some even to seek a fourth term. The new governors-for-life are likely to amass even more power rather than less. While the Kremlin didn't author the final version of the bill -- which extended additional terms to so many governors -- it didn't lobby against the changes nor did it oppose them, since President Putin signed the bill rather than returning it to the Duma with a veto.

A second contradictory action undertaken by Putin has been to back a regional solution to the question of land reform. Last month, Putin told the State Council that Russia's regions should be "given maximum freedom in setting the land problem within the framework of basic law." While this may be the only politically feasible solution, it cannot help but work against Putin's aim of creating a single legal space across Russia.

A third step which appears to undermine Putin's reforms was his appointment last month of former Primorskii Krai Governor Yevgenii Nazdratenko as chairman of the State Fishing Commission. Rewarding a flamboyantly corrupt regional official with a plum new job assignment in Moscow would hardly seem to reinforce Russia's "power vertical" -- particularly when this official is already openly challenging the policy he has been tasked by his higher ups with carrying out. On 11 March, Nazdratenko gave a press conference in Vladivostok in which he again condemned the commission's policy of distributing quotas for fish and seafood catches by auction, charging that it "threatens the food supply." As head of the commission, Nazdratenko should be ensuring that the auctions are successful. But as governor, he actively lobbied against them. In fact, Nazdratenko's fishing policies as governor likely inspired the commission's new policy: Nazdratenko kept new entrants to the fishing market out, as fishing quotas were awarded on the basis of personal loyalty to him (see "RFE/RL Russian Political Weekly," 12 March 2001).

When news of Nazdratenko's resignation and Putin's plans to push a new Land Code through the State Duma first emerged last month, it appeared that Putin might finally achieve what his predecessor, Boris Yeltsin, could not. Yeltsin had tried for years to dismiss Nazdratenko, while the Land Code has stalled in the lower legislative house since 1994. But Putin got Nazdratenko out of Primorskii Krai only by luring him with a job offer in Moscow, something Yeltsin could have done but chose not to. Likewise, Yeltsin could have made a compromise on land legislation, allowing regions to pursue their own approach to land sales, but he had set his sights a bit higher.

Some analysts have attributed Putin's recent actions to indecision -- he hasn't yet decided what he wants to push for. They believe Putin's high public approval rating represents a reserve of political capital that he will later tap once his agenda has been fully formed. They fear that Putin has not yet decided whether he wants to try to establish the rule of law in Russia's provinces or whether his ultimate goal is simply to ensure that regional leaders, who are in place, are loyal. And that is why he extended a "carrot" to them in the form of a third term and even a fourth.

Others suggest that Putin's recent actions betray his weakness. His success in public opinion polls is merely a useful -- but ultimately not decisive -- weapon in the battle among political elites in Moscow: they suggest that Putin couldn't dismiss Nazdratenko and install a new regime in the krai so he had to lure Nazdratenko to Moscow. Also, they say, Putin hasn't tried to push for the kind of land code that reformers in his government might want, because he knows that he would fail.

Putin's lack of progress on the regional front is leading ever more observers to begin to think that Putin may be indecisive, weak, or perhaps both, a conclusion that almost certainly will eventually cut into his approval ratings unless he is able to show some real progress soon.